retail news in context, analysis with attitude

The Wall Street Journal reports this morning that “packaged-food manufacturers that make products like cheese and juice hope to cozy up to colorful and fragrant tomatoes, apples and pumpkins—in some cases fundamentally changing traditional store layouts.

“The produce section ... is increasingly located near the supermarket entrance, so every shopper passes through it. And stores are finding that consumers consider even packaged foods placed there to be fresher and higher quality—researchers call this a ‘halo effect.’

“But some grocers are grumbling, wanting to keep packaged goods from invading the produce section, which they say gives them ‘freshness credibility’ that distinguishes them from the competition, such as warehouse clubs and convenience stores. With limited space, grocers are most likely to display fresh, high-margin items in the produce section.”
KC's View:
I think that retailers need to very careful about this, and resist the urge to take things like slotting allowances and preserve the produce department’s role as a fresh-oriented image-setter. Short-term bucks could have a negative long-term impact.